What is National Savings Certificate?
National Savings Certificate is a Government Savings Bond usually for small savings and income tax saving investments in India. It is a post office savings product and extends many benefits. Other similar schemes offered by the government are Public Provident Fund, Post Office Fixed Deposit and Post Office Recurring Deposit, etc.
Who can avail NSC?
Any individual who desires a safe investment avenue to save tax while earning can invest here. There is assured interest and protection of capital. But they cannot dispense inflation-beating returns like National Pension Scheme (NPS). You have to be an Indian resident to be eligible for NSC. You can invest with another adult jointly too. However, joint families, Non-Resident Indians and corporate companies cannot invest in NSC. The minimal amount to invest is Rs 100.
Documents required to file NSC
Form 1 is the application form for this investment(investment planning). It permits you to declare the amount of investment and the nominee. You also need the proof of identity and proof of address. Your passport can be used for identity and address proof, for instance.
Form 1 is the application form while Form 2 is the nomination form where you nominate a beneficiary. Form 3 is the change of nomination form in case you want to cancel the existing nomination. You may want someone else to be the new nominee.
Perks of NSC
1. Established Revenue– You can maintain routine income as you get guaranteed returns.
2. Tax Saver– This is a government-backed tax-saving scheme where you can invest as far as Rs 1.5 Lakhs. Thus, you can assert the benefits of 80C deductions.
3. Power of Compounding– The returns don’t beat inflation but the interest gets compounded and reinvested.
4. Nomination– Investors can nominate someone regardless of him/her being a minor or above 18 so that the nominee inherits the amount in the unfortunate event of the investor’s death.
5. Maturity period– You can select one of the two maturity periods. One is for five years while the other is for a decade.
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